SSE should be careful what they wish for

SSE is playing a dangerous game by using energy policy to defend price rises.

Alistair Phillips-Davies, the chief executive of SSE, in response to criticism over price rises has argued that the government should question the introduction of green levies. SSE says homeowners will see their power bills rise by £26 a year as a result of green energy tax policies. He said:

“A price rise is never a good thing to do, but if it focuses everybody on a debate about what we as a nation should be spending money on, then in one way it will be helpful. We need to think about what people really want to pay for; maybe it is time to retreat from decarbonisation and focus more on the cost of living.”

Shadow energy secretary Tom Greatrex said SSE and other energy companies were using green measures as “a diversionary tactic”. He also pointed out that most of the extra money helps pensioners and others with their bills and SSE’s comments fail to address the lack of energy company transparency.

But he added: “The carbon price floor was somewhat ironically introduced by George Osborne, who is supposedly against green measures, and it was he who chose to accelerate it. It is much higher than the equivalent in the rest of Europe, which uses the emission trading scheme, and we need to bring the UK level more in line with that. Essentially, at the moment it is a cash cow for the Treasury.”

SSE is also one of the beneficiaries of energy policy through the subsidy for renewables. In fact, they have been vocal in their complaints about the lack of support for renewables and the need for a consistent energy policy to give investors confidence.

SSE’s new approach is likely to give succor to those in the UK Government who oppose renewables. The Prime Minister recently said at PMQ’s that a decarbonisation target would cost every household in Britain £120. The fact that this isn’t true, as the IPPR’s Will Straw has responded, won’t stop them changing track.

SSE itself may be having second thoughts, or possibly financial concerns. The Sunday Herald reported that they are pulling back financial support for wave power projects.

Brian Wilson highlights the structural failings of the current system in his Scotsman column. He asks: “But where is the renewables industry heading in the midst of all the angst about prices? It always has to be borne in mind that 90 per cent of the investment in Scottish renewables is borne by consumers in England.”

So SSE should be careful what they wish for. Their expedient attack on the cost of energy policy to consumers, might undermine the very policy their business plan relies on.